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The cost-to-serve concept is used to quantify activities and costs in the supply chain needed to meet customer demand for products. By modeling all logistics activities in the network and properly allocating fixed and variable costs, an analyst can gain understanding of the actual cost of supplying a specific customer.

Optilon offers methods and technologies that can take into account fixed costs for sites, processes, process, personnel, equipment and transportation availability. Our technologies can also describe variable costs throughout the supply chain.

Example questions for cost-to-serve modeling include:

  • What is the cost-to-serve and margin for each SKU in the current network?
  • What is the cost-to-serve and margin for each SKU level of a new network?
  • Can profitability be improved by a reconfiguration of the network to reduce fixed and variable costs?
  • What business strategies will best support the growth or reduce costs in rapidly changing markets?

Learn more about our offerings in Supply Chain Design.

Do you want to know more about Cost-to-Serve?

Please contact Optilon’s Sales VP Sales & Marketing Jens Stenquist on +46 709 379 285 or